Brexit Impact Survey Results
Following Theresa May's outlining of the Government's thoughts on Brexit earlier this week , what does the Office Products industry think of the impact of the vote to leave the European Union?
BOSS's Brexit Impact survey was completed at the end of 2016 by companies with combined annual revenues of around £1.6 billion, and employing around 8,000 staff.
Half of the responses were from manufacturing/vendor companies, with the balance being predominantly from resellers and a small number of service providers.
One of the key areas of concern for UK companies is the impact of the vote on their ability to do business overseas. 11% of responses said it is a significant part of their business, whilst 38% said it was a minor part.
Equally significant is the impact that importing from the EU has on industry input prices. Three quarters of all companies surveyed either import directly from the EU or rely on their suppliers to do that for them. That contrasts with two thirds importing from non-EU countries, either directly or via their supply chain.
85% of companies surveyed felt that the general impact of the Brexit vote had impacted slightly negatively (52%) or significantly negatively (33%) on their business. Only 9% felt there had been a positive impact.
94% of responses indicated a significantly negative (72%) or slightly negative (22%) impact on product costs. Some might be surprised that general inflation was only 1.6% in December, per the official figures announced yesterday (Office for National Statistics), up from 1.2% in November. Some analysts suggested that the figures mask the likelihood that retailers are sheltering consumers from the impact of raw material or input price increases. In the Office Products industry input price inflation is already anticipated to be significantly higher. These increases cannot be absorbed for long as the underlying profitability of the industry is not felt able to support them. Indeed 81% of those surveyed felt the Brexit vote to have had a significantly negative (47%) or slightly negative (34%) impact on their business profitability so far.
How are you coping with the inflationary pressures? Your input to our price pressure survey is valued here if you haven't completed it yet.
When ranking the CBI's suggested considerations for the Government when negotiating a new relationship with the EU, the most important (61%) was overwhelmingly felt to be retaining the ease of UK-EU trade that businesses currently enjoy from the single market. So, while it is clear from Mrs May's speech that her intention is for the UK to leave the single market, it is also clear that the majority of our members support any attempts the Government make to ensure trade continues flowing easily between the UK and the EU.
The pound rallied by over 2% earlier this week following the details being given of the plans. Unemployment fell again in November to an 11-year low. The economy has held up well so far after the Brexit vote. BOSS hopes that companies will continue to invest for growth with the confidence that there are bright economic times and opportunities ahead. The survey showed that a fifth of firms expected their revenues to grow following the Brexit vote. Nearly half of all firms saw opportunities in the economy with a quarter expecting increased exporting competitiveness.
Next week: The Apprenticeship Levy and how BOSS can help your business develop your staff and their skills.